First Solar: Citi Cuts Rating, Target, Estimates; Contends Street Is Too Ambitious On Hopes For Stimulus Plan

Citigroup’s Timothy Arcuri this morning cut his rating, target and estimates on First Solar (FSLR) . Arcuri cut his rating to Hold from Buy; his target drops to $170, from $205. For 2009, his EPS estimate drops to $6.78, from $6.80; more significant;y, for 2010 he goes to $8.88 from $10.35. Arcuri says Q4 results should be okay, and he says FSLR is still best in class, but that with the stock up 60% off its low, he has concerns about three factors: Near-term inventory risk. Secular margin compression, and related multiple compression. Sector supply overhand that is apt to persist through 2010 even in the face of the forthcoming government stimulus package. Arcuri says large-scale German solar projects are getting pushed out; he says there is a risk of a first half “air pocket.” Arcuri thinks the Street is over-estimating the impact on the sector from the pending Obama Administration stimulus plan. “Solars have rallied on pending government stimulus ... (link)